NEWS: Microsoft Discussing Buying AOL from TimeWarner

Unconfirmed Rumor: Industry sources are indicating that Microsoft is in the midst of talks with TimeWarner over the purchase of the troubled online unit, AOL (America Online). This rumor has been whispered about for some weeks now, and now we're seeing indications that talks are indeed occurring. Assuming such a deal were to be approved (in theory, less of a controversial deal than when AOL bought TimeWarner), there could be far-reaching ramifications on several aspects of computers and online access. -stay tuned for updates- [Edited on 19-3-2004 by SkepticOverlord]

Skeptic, wouldn't such a merger fall under the domain of anti-trust regulation and investigation by the FCC? Of course, the original TW-AOL merger did as well and that was allowed to happen (to the detriment of TW stockholders).

Microsoft has the cash to make this happen. The TW family in the AOL shareholders would most likely approve it. The AOL family in the AOL shareholders might not.

Time Warner is denying the rumor, and it doesn't look like there are any insider trades indicating this will be happening:
biz.yahoo.com...

Given the huge drops in the stock of both companies, and the debt structure, it's not a move that makes a whole lotta sense right now.

Does not make a lot of sense?

MSN Networks and AOL are 2 of the biggest ISP worldwide. I think assimilating your major opponent makes a lot of sense, business wise.

If this deals happen, what will be next? Will Microsoft become un-stoppable? Are they the anti-christ?

Byrd, Microsoft can absorb the debt in cash. It gains the #1 online service in the US and thus a vast consumer base. MSN has never risen to the level that AOL has so this would be a boon for Microsoft. The huge drop in stock value makes a cash offer that much easier and attractive.

TWX has 4.5 billion shares outstanding and is trading at 16.86 currently. A price of $20 per share would cost Microsoft $9 billion. Microsoft is sitting on nearly $53 billion in cash.

Even without factoring in annual AOL subscription revenue and not worrying about advertising (one of AOL's problems right now), Microsoft would win because it can fold its MSN service in AOL and reduce its investment in MSN and divert that cash elsewhere.

I would do it in a heartbeat.

Having worked for over a decade with Microsoft I can tell you this is the brass ring for them. AOL stomped all over MSN (at least in how it was origionally envisioned).

As for the anti-trust it may not be an issue. Microsoft did a great job of seperating the executive, research and staffing for MSN from it's primary company structure many years ago. In order to not be in violation of the anti trust laws this seperation was required. I worked for the Windows division and trust me, the level of communication between MSN and the rest of the company is very very limited. We often felt we learned more about AOL's plans than the plans of MSN.

I do believe this could happen, especially since we see such a huge market in cable modem/DSL service and so many customers moving into that market away from the "full package deals" such as AOL.

IN the end the customer will win, AOL is a great service for new users to the internet or those wanting one stop shopping. To have that service with the power of the MSN structure behind it could concievably move it very far forward.

Also if this happens expect to see MSN go away as a seperate product and all funding for R&D to move into the AOL realm.

Color me happy about my stock shares

God help us all if this is true.









[Edited on 19-3-2004 by Tamahu]

I don't think AOL will ever truly die as I have hoped. What I do hope, if this is true is that MSN will turn AOHELL into a worthwhile service instead of an internet joke.

Plus this would help peoples stock those who own AOL. So I guess it could be a good thing...

I apologize for anyone here who uses AOL but I don't like AOL. I've had too many problems with them in the past. I hope this merger doesn't happen. Too many people in the world use the Microsoft OS and don't want to see AOL becoming apart of that. That would really tick me off.

Originally posted by titian
Byrd, Microsoft can absorb the debt in cash.

Ah... wasn't thinking about that.

It'll be interesting to see what happens. AOL ate Compuserve (I'm a Compuserve member) and they now "sorta" support it. Kinda. When they think about it.

I didn't switch to AOL because I don't care for the bloat interface -- and Compuserve had one of the largest dialup modem pools around (including overseas.) I travele frequently (and sometimes out of the US) and need something I can access from on the road. It'd be a REAL pain to try and find an ISP with good dialup access that's as wide-reaching as Compuserve.

Yeahyeah. I know. I'm a spoiled geek. I'll probably have to look into using my cell phone for dialup services. It's a pain, I tell ya!

Compuserve (and Prodigy) were the first two services I used. I loved Compuserve's interface (being an original DOS geek) but I could never remember the damn member numbers.

Well im not surprised that Microsoft is deciding a move like this,Looks like billy's after more $$$$........barstard

the aol time warner merger was never cozy.

steve case never did a great job with aol in the first place.

it makes sence to me that microsoft wants the customers and the noob internet user brand name.

besides. everyone hates aol.

I mentioned this to my father-in-law over the weekend and he said he'd read about that in the local finance section. I've heard nothing more though.

Has anyone else heard anymore on this?

Damn, if this were to happen you better believe you won't be able to delete AOL off your Windows comp...GRRRRRRRRRRRRRR

I'm still trying to figure out why people pay so close attention to MiscroSoft. It seems that during the Clinton administration, more money was spend on trying to catch Bill Gates than Osama bin Laden.

Why DO people hate this guy so much?

Originally posted by kramtronix
I'm still trying to figure out why people pay so close attention to MiscroSoft. It seems that during the Clinton administration, more money was spend on trying to catch Bill Gates than Osama bin Laden.

Why DO people hate this guy so much?

Well back in the Clinton administraion, Gates was basically forming a monopoly in a number of products, not the least of which was Microsoft's web browser, internet explorer, which is actually now fully integrated into the filing system of the OS. He was punished and he is doing better now, but there is still a lot of mistrust against him.

Well, the New York Yankees have a baseball monopoly by buying up all of the most talanted players in the league, but I don't see anyone investigating Steinbrenner.

Originally posted by kramtronix
Well, the New York Yankees have a baseball monopoly by buying up all of the most talanted players in the league, but I don't see anyone investigating Steinbrenner.

er, yes, well...you should head that one up i think. yeah, just report back here, and we'll let the proper authorites know. I'm sure they'll drop microsoft immediately.